Eur. Phys. J. Special Topics 229, 1645–1659 (2020)
https://doi.org/10.1140/epjst/e2020-900262-y

Regular Article

What is an explanation? Statistical physics and economics

Department of Economics, The New School for Social Research, New York, NY, USA

^a e-mail: reddysanjayg@gmail.com

Received: 3 November 2019
Received in final form: 29 February 2020
Published online: 7 July 2020

Abstract

There is a long history of statistical physics being looked to as a source of inspiration for the social sciences. There has been growing interest in the field. However, the bridge between the two has been imperfect. One way to understand why is that there are differences between their objects of explanation. While approaches derived from statistical physics may offer a useful tool in specific settings, it is vital to recognize when the insights that derive from them may be limited as a result of differences between the social and the physical world. We argue that methods from statistical physics can help in providing explanations of economic outcomes only if they include adequate attention to processes and moreover characterize these in an appropriate way, recognizing their specifically social character.